Consumer Spending Softened Before Holidays
Washington, DC, January 3, 2023-"The U.S. economy showed fresh signs of slowing late this year as consumer spending and business demand softened and inflation eased,” reports the Wall Street Journal.
“Personal spending increased 0.1% in November from the prior month, the Commerce Department said Friday, marking a pullback from a robust 0.9% increase in October. Households boosted spending on services last month while cutting spending on goods, including autos. When adjusted for inflation, consumer spending was flat.
“The personal-consumption expenditures price index-the Federal Reserve’s preferred gauge of inflation-rose 5.5% in November from a year earlier, a significant cooling from 6.1% in October. The core PCE-price index, which removes volatile food and energy prices, rose 4.7% in November from a year earlier, compared with 5.0% in October.
“On a month-to-month basis, the PCE-price index rose 0.1% in November from the prior month, compared with October’s 0.4% increase. Core prices rose 0.2% in November from the prior month, easing from October’s 0.3% increase.
“Other figures released on Friday pointed to slowing business demand with a decline in orders for long-lasting goods. Consumer sentiment improved as concerns over inflation eased. And new home sales increased in November from the prior month, but were well below sales for the same month a year earlier.”